IBP brings together experts to discuss energy transition

Event – 02.05.2019

In the event in partnership with the EPE, agents of the sector reinforce the competitive advantages of Brazil in renewable

The Brazilian Petroleum, Gas and Biofuels Institute (IBP), in partnership with the Energy Research Company (EPE), promoted on April 25th the first edition of the Debates Cycle for Energy Transition. Focusing on the transition to a low carbon economy, the event brought together experts to discuss two of today's major global challenges: the energy transition landscape and the energy geopolitics. For José Firmo, IBP’s CEO, such discussions create opportunities for the sector.

"Just as Brazil decided to strategically open the exploration and production market, which has brought significant results, we need, as a country, to discuss the insertion of natural gas into the energy mix. Brazil has not yet found an effective model for gas to be used as a fuel, "said Firmo. "We have an opportunity, however, to take advantage of the associated gas to be produced in the next five years, for example, for the reindustrialization of Brazil", he added.

The continued growth of oil production in Brazil reinforces this opportunity. According to EPE's Director of Petroleum, Gas and Biofuel Studies, José Mauro Coelho, Brazilian oil production will double in the coming years, reaching 5 million barrels per day in 2030. "Brazil is expected to export about 3 million barrels a day. daily barrels of oil at the end of the decade. But on the other hand, we also have a competitive advantage in biofuels. Ethanol production is expected to grow, reaching 49 billion liters per year in 2030, compared to the current 34 billion liters. Just as the production of biodiesel will increase, going from 5.4 billion liters to 11 billion liters", explained Coelho.

Although the energy transition occurs slowly, over many years, Brazil has the advantage of already having a renewable energy mix. According to Luiz Augusto Barroso, CEO of PSR, the pillars of renewability of the national mix - hydroelectric, wind and solar - complement each other and form a different portfolio from the rest of the world. "The basis of our energy matrix is the goal many countries dream of achieving in years. The big challenge at the moment is to find business, financial and regulatory models for the energy transition", Barroso said.

Alexandre Szklo, associate professor of COPPE / UFRJ's energy planning program, believes that Brazil has great competitive advantages over other markets, but that the country's role in this global energy transition depends on the need to have state policies for the sector, not governmental. "We have an energy mix with great potential. We just need to chart the path to where we need and want to get", Szklo said.

Market Initiatives

Oil and gas companies are already preparing for the energy transition, investing in sources other than oil and positioning themselves as energy companies. According to Flávio Rodrigues, director of Government Relations and Regulatory Affairs at Shell, the annual investment of the oil company is about US$ 25 billion, with approximately US$ 2 billion destined for new energy.

For the executive, the main competence necessary for the original oil and gas companies to become more complete is the understanding of the local reality. "From the training of personnel to a greater understanding of issues such as local regulation and market, it is possible to make more assertive decisions", said Rodrigues.

The next issue of the Debate Cycle for Energy Transition in June will address the issue of climate change. In total, there will be five meetings throughout the year focused on the challenges of transition.